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With the EIS part, he earned the 30% IT reducer then subsequently sold inside the 3 year window. Therefore he would have lost the benefit.
Don’t worry, even with five days to go until the exam – you can fit a hell of a lot of question practice in in that time. Here’s what is currently working for me.
1. There’s a section in the beginning of the P&R kit titled ‘Revision P6’. It has all the core topics in bold – it’s a great starting point in terms of a check list.
2. Question practice, question practice, question practice. With each completed question, there’ll be something in there that you wouldn’t have done before, it’ll all help build confidence for Thursday morning.
3. With your notes – remember anything extra you learn now still needs to be practiced in the form of an exam-style question. Learning benefit in kind notes is great, but the bulk of the marks in this style of question will be for comparing and contrasting remuneration packages in terms of tax paid by both the e’er and e’ee.
4. Question practice.
5. Question practice.
For every three questions you complete – try one in full (with formatting to get used to winning your 4 marks) and two in note-form. You’ll fly through questions, and cover a vast part of the syllabus that way.
Good luck!
I looked at Q3 and went to skip then realised it was PFI and the notes to the CF prompted a lot of marks.
Q3a.
Evaluate the appropriateness of the cash flow forecast and suggest further audit procedures to perform. (14 marks)Appropriateness.
-Sale of investments: Held at FV of $350k yet management have recorded a sale at $500k in two years time.. optimistic.
-The company have negative projected CFs for the next 2 and a half years and expect the bank to loan $1.5m when the current loan expired and is repaid.. unlikely.
-Two more than I am struggling to remember!
Further procedures.
-Review prior performance of investment shares to confirm whether $500k is reasonable.
-Inspect all bank correspondace for evidence of previous defaults or mispayments of loan.
-Review competence of the CF preparer, look at credentials etc.
-Review sales forecasts to confirm the reasonableness of the cash receipts from customer.
Q3b.
Evaluate the matters to consider in respect on the loan from Mr J. Stewart. (6 marks)-Related-party transaction
-All parties to be adequately disclosed regardless of whether transactions occurred or not
-Disclose all related party transactions
Further procedures
-Obtain RPT list from the prior period and investigate any discrepancies / additions
-Discuss with management their procedures for recognising a RPT
-Inspect notes to FS to confirm all disclosures are appropriate and adequate.